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Larker Tool 1818500

Price: $2.50


The comparative statements of Larker Tool Company are presented below.



Larker Tool Company
Income Statement
For the Years Ended December 31
2014 2013
Net sales   1,818,500  1,750,500
Cost of goods sold   1,011,500  996,000
Gross profi t   807,000  754,500
Selling and administrative expense   516,000  479,000
Income from operations   291,000  275,500
Other expenses and losses 
Interest expense   15,000  14,000
Income before income taxes   276,000  261,500
Income tax expense   84,000  77,000
Net income   192,000  184,500

Larker Tool Company
Balance Sheet
31-Dec
Assets
Cash   60,100  64,200
 Short-term investments   69,000  50,000
Accounts receivable (net)   105,750  102,800
Inventory   110,950  115,500
Total current assets   345,800  332,500
Plant assets (net)   600,300  520,300
Total assets   946,100  852,800
Liabilities and Stockholders’ Equity
Current liabilities
 Accounts payable   160,000  145,400
Income taxes payable   43,500  42,000
Total current liabilities   203,500  187,400
Bonds payable   200,000  200,000
Total liabilities   403,500  387,400
Common stock ($5 par)   300,000  300,000
Retained earnings   242,600  165,400
Total stockholders' equity   542,600  465,400
Total liabilities and stockholders' equity   946,100  852,800

All sales were on account.

Instructions
Compute the following ratios for 2014. (Weighted-average common shares in 2014 were
60,000.)
(a) Earnings per share. (f) Receivables turnover.
(b) Return on common stockholders’ equity. (g) Inventory turnover.
(c) Return on assets. (h) Times interest earned.
(d) Current. (i) Asset turnover.
(e) Acid-test. (j) Debt to total assets.

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